G2 Checks In On Cross-Media

In the wake of Bob Pittman’s resignation and a stock market thrashing of AOL/TimeWarner stock, research firm Gartner G2 has issued a report urging more advertiser-friendly practices for cross-media buys.

“Advertising recession aside, Pittman was largely responsible for and involved in developing cross-platform deals and combining separate advertising sales teams,” says G2 senior analyst Denise Garcia. “AOL's Global Marketing Solutions group—established in August 2001 to sell cross-platform ads and integrated promotions—was intended to save time and money for advertisers as well as AOL Time Warner. With all of these positive attributes, the Global Marketing Solutions group was able to sign over $1 billion in deals. But the individual media properties argued that they could get more out of each advertiser by working separately, and it's unclear how much of the reported $1 billion in advertising space was actually sold.”

Garcia says AOL/TW did not disclose the terms of each cross-media deal, but many were business development arrangements that exchanged advertising and integration for products, services or stock, as was the case with Nortel, Philips and Kinko's. She says concerns also arose around the deep discounts given to these large advertisers—some as much as 50%.

“Advertisers also expressed confusion in working with these groups, wondering who was actually in charge. Since many of these deals were signed within the past year, results can not be measured, but Toyota—which signed a $160 million deal last September—has not indicated that it will renew another cross-platform deal,” the report states. “This is not a good sign.”

Garcia recommends better organization and management from the media owner to make cross-media deals work. Centralized advertising sales should only concern themselves with a few carefully considered, named accounts, she says. This team should set clear goals for the centralized department. If the centralized group fails to meet goals, accounts should go back to individual sales teams.

To advertisers Garcia says: “Clarify which individuals have primary responsibilities with each account and who your primary contacts are. Work only with those people who create, negotiate and evaluate your contract. Working with individual media properties to negotiate best price and creative options only confuses the arrangement. It generates internal strife and the very real possibility of having to work with media properties individually."

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